Maersk Line Books USD 220 Mn Profit in Q3 amid Heavy Impact of Cyber Attack
- Business & Finance
Danish container shipping giant Maersk Line reported a profit of USD 220 million in the third quarter of the year, a major rebound when compared to the loss of USD 116 million reported in the corresponding period last year.
The return to profit in Q3 was driven by the continuation of positive market fundamentals as container demand grew 5%.
In addition, Maersk Line’s average freight rate and revenue saw a 14% increase respectively compared to Q3 2016, with the company’s revenue reaching USD 6.1bn.
This is the second profitable quarter for the container carrier as Maersk Line announced its return to the black in the second quarter of the year, having posted a profit of USD 339 million, against a loss of USD 151 million in the second quarter of 2016.
“The development was mainly driven by a 14% increase in average freight rate to 2,063 USD/ FFE (1,811 USD/FFE) partly offset by a 2.5% decrease in volumes to 2,632k FFE (2,698k FFE). Volumes grew by 0.6% on headhaul, however more than offset by a decrease of 8.8% on backhaul,” the company said.
As disclosed, the freight rate increased across all trades compared to Q3 2016 as EastWest increased by 20%, North-South by 14% and Intra-regional by 7%.
The company felt the impact of the June cyber attack on its business performance in July and August, while contingencies related to recovery from the cyber-attack resulted in a negative development on volumes, utilisation and unit cost performance throughout the quarter.
The cyber attack resulted in a negative development in Maersk Line volumes of 2.5% and increase in unit cost of 3.9% at fixed bunker prices, as explained by CEO of A.P. Møller – Mærsk A/S, Søren Skou.
As explained, overall the company cannot be satisfied with the quarterly result, regardless of the heavy impact of the cyber attack, as the carrier is not happy with the development of volume growth.
Skou said that a better job can be done in the following quarters and that the company is making progress toward more sustainable earnings.
During the quarter, Maersk Line recycled three vessels and took delivery of two out of 11 second generation Triple-E’s and three out of nine 15.2k TEU vessels ordered in 2015.
By the end of Q3, Maersk Line had 20 vessels in the order book, corresponding to 261k TEU, slated for delivery in 2017 and 2018. These include seven 20.6k TEU second generation Triple-E’s, six 15.2k TEU vessels and seven 3.6k TEU ice-class vessels.
Maersk Line’s total order book corresponds to 7.4% of the current fleet and the company has reiterated its standpoint that it doesn’t intend to order new ships.
For the nine-month period the company posted a profit of USD 493 million, against a loss of USD 230 milllion reported for the same period last year, and a positive ROIC of 3.2% (negative 1.5%). Volumes increased by 2.8% to 7,932k FFE (7,714k FFE) and average freight rate increased by 13% to 2,030 USD/FFE (1,793 USD/FFE).